How lump-sum payments could streamline emergency care

A redesign of the reimbursement model for hospital emergency departments (EDs) and uncompensated care would provide incentives to improve emergency care and keep competition robust, argues a blog post from Health Affairs.

Demand for ED services has steadily increased in recent years, even after the Affordable Care Act led to a steep rise in health coverage, according to the post, but reimbursements for those services have not kept pace. Moreover, between 1992 and 2012, when ED visits increased 47 percent, the number of providers offering facility services dropped 11 percent, and nearly 4 of 10 EDs report overcrowding issues.

EDs and other providers of uncompensated care receive $73 billion a year from the federal government, distributed in the form of reimbursement adjustments. Switching to a lump-sum, facility-by-facility model would reward hospitals that provided more efficient emergency care, according to blog post author Christopher Pope, Ph.D., senior advisor at the Gary and Mary West Health Policy Center.  

The government should allocate these sums for specific public goods, such as bed capacity, trauma resources, specialist access and surge capacity, tailoring payments to specific population health needs and access issues. Not only would such a strategy control the cost of treating uninsured and Medicaid patients, it would also safeguard against undue rationing of elective care by limiting lump-sum funding to ED care, Pope argues.

"Such a reform would clarify the nature and extent of the public subsidy for uncompensated care, and allow policy trade-offs to be made more consciously. It would ring-fence the taxpayer guarantee of ED solvency, preventing it from sprawling to eliminate competition from the provision of hospital care more generally," he writes. "This is needed to permit the overdue separation of two very different organizational missions: emergency safety-net responsibilities and the efficient provision of innovative elective care."

 To learn more:
- here's the blog post